1. The facts duly admitted by the court below are as follows.

A. On November 1997, the Plaintiffs agreed to lend KRW 2 billion to Jinjin Construction Co., Ltd. (hereinafter “Dinjin Construction”) to Jinjin Construction, and the Plaintiffs agreed to return KRW 2.6 billion total of the investment income 600 million to the above principal until May 15, 1998, and the head of the Defendant’s partnership jointly and severally guaranteed the above obligation against the Plaintiffs on behalf of the Defendant.

B. The Nonparty representing the Defendant agreed to use KRW 1 billion out of KRW 2 billion that the Defendant would borrow from the Plaintiffs in return for the joint and several surety for the construction of the friendly construction as above between the Jinjin Construction Division.

C. However, Plaintiff 2 had already lent KRW 1,77,00,000 to Jinjin Construction prior to the above agreement, and asserted that the agreement was made to lend KRW 2,000,000,000, including the loan, Plaintiff 1 and Plaintiff 2 leased only KRW 51,000,000 to Jinjin Construction, with the aggregate of KRW 91,000,000,000,000,000,000,000,000,000,000,000,000 won.

2. The court below held that the defendant is a joint and several surety of Jinjin Construction and has an obligation to pay each loan of KRW 50 million to the plaintiff 1 and KRW 410 million to the plaintiff 2,000,000,000. Since the non-party did not have a resolution of the members' general meeting or the board of representatives at the time when the joint and several surety was held as the principal of the defendant's association, the above act of joint and several surety was null and void without a resolution of the board of directors or other resolution of the board of representatives, if the representative of the corporation knew or could have known the other party to the transaction that there was no resolution of the board of directors or other resolution of the board of representatives, the above act of joint and several surety of the defendant falls under the category of the transaction which is stipulated in the articles of incorporation of the defendant's association as a joint and several surety, and it is found that the non-party did not go through the resolution of the members' general meeting or the board of representatives' meeting.

3. However, we cannot agree with the judgment of the court below for the following reasons.

According to Article 26 subparagraphs 3 and 9 of the former Land Readjustment Project Act (repealed by Act No. 6252 of Jan. 28, 2001), the method of borrowing loans, interest rate, repayment method, and other matters prescribed by Presidential Decree or articles of association shall undergo a resolution of the members' general meeting. Thus, in light of the purport of the above provision, the land rearrangement association's act of the representative without undergoing a resolution of the members' general meeting as to the matters to be decided by the law as to the debt of others shall also undergo a resolution of the members' general meeting, and the act of the representative shall not be effective (see, e.g., Supreme Court Decisions 94Da31242, Feb. 24, 1995; 95Da27158, Nov. 15, 1996; 200Da72671, Mar. 23, 2001).

According to the records, in the case of this case, the articles of incorporation (No. 2) of the defendant association provides that "the method of borrowing loans, interest rates, repayment method, and other important matters" as the resolution of the general meeting (Article 17 subparagraphs 3 and 14), but the council of delegates shall be established to act as an agent of the general meeting (Article 18), and the above resolution shall be decided in lieu of the general meeting (Article 19). Thus, even based on the facts recognized by the court below, the general meeting of the members of the defendant association or the board of delegates shall be deemed null and void unless there are special circumstances.

Nevertheless, the court below rejected the defendant's defense under the premise that the act of joint and several surety was invalid and the burden of proof was also the defendant in the case where the plaintiffs knew or could have known that the act of joint and several surety in this case was conducted without the resolution of the general meeting of union members or the board of representatives. Such judgment of the court below is clearly erroneous in the misapprehension of legal principles of the Land Partition Adjustment Act, which affected the conclusion of the judgment.

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, the part against the defendant among the judgment below is reversed, and that part of the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices

Justices Park Jae- Jae (Presiding Justice)